N A T I O N A L C E N T E R R E P O R T S
Know Your Customer Regs
to be Withdrawn
In the January/February 1999 Court Report, the National Center alerted our members to the Know Your Customer rules, an onerous tracking mechanism which would invade the privacy of all banking customers. The four regulatory agencies over banks are the Federal Deposit Insurance Corporation, the Federal Reserve, the Office of the Comptroller of the Currency, and the Office of the Thrift Supervision. Each agency drafted and published four separate, but similar, regulationsincluding the Know Your Customer rulesin the Federal Register on December 7, 1998.
Although the regulations were intended to crack down on money laundering schemes and other illegal activities, Home School Legal Defense Association, along with a coalition of other organizations, saw them as a gross violation of the privacy of all law-
When the National Center registered a complaint with the FDIC in December, the banking regulators were already reassessing their proposed rules because of tremendous public opposition. By January 27, the American Bankers Associationoriginally for the controversial regulationshad announced that it now supported quashing them. And FDIC Chairman Donna Tanoue admitted to the press, It is evident to me, personally, that we will have to do something different from what was proposed.
Staffers for Senator Phil Gramm (R-TX), Senate Banking Committee Chairman, told HSLDA that this committee also opposed the new rules and was prepared to take steps to prevent implementation. On the House Banking Committee, Congressman Rick Hill (R-MT) said that the proposed regulations would be abandoned.
Adding more heat to the regulatory agencies, the U.S. Senate on March 5 passed, by 88-0, a formal resolution asking them to withdraw the Know Your Customer rules.
By March 11, the FDIC alone had received 235,878 comments opposing and merely 33 comments supporting the rules. As this article goes to press, FDIC counsel has indicated that the Know Your Customer proposal should be withdrawn by the end of March. We praise God for this anticipated victory and powerful grassroots response.